Recent press reports on Medicare’s decision to evaluate coverage policy for the new cancer therapy Provenge were highly critical of the Centers for Medicare and Medicaid Services (CMS) and its role in examining the evidence behind FDA-approved products. Let’s take a step back.

In fact, this is exactly what CMS should be doing – carefully considering the evidence to make a determination on whether a new therapy is reasonable and necessary and thus appropriate for payment by the Medicare program. Subverting this function is in no one’s best interest.

As Provenge is a novel approach for treating advanced prostate cancer, clinical testing focused on late stage patients. The Medicare Coverage Advisory Committee (MEDCAC) members expressed general confidence that the current body of evidence supports coverage of the on-label use of Provenge, but emphasized that gaps still exist in evaluating the product’s performance in the Medicare population. Further, the panel indicated that more evidence is needed to determine Provenge’s safety and effectiveness in off-label indications.

The review of Provenge by CMS and its MEDCAC is not unusual. Many National Coverage Decisions (NCDs) made last year – and in years prior – focus on novel technologies, and often in the cancer field. In many cases, Medicare allowed for coverage for a limited population and also required additional data. Avalere’s analysis of NCDs shows that from 2008 to 2010, CMS made coverage conditional on the collection of additional data in nearly 25 percent of NCDs. Further, analysis of data from the Avalere EBM Navigator demonstrates that oncology ranks as a top therapeutic area in which the federal government has deployed millions of dollars on comparative effectiveness research. Medicare’s focus on oncology will only intensify in the future.

Serious evaluation of new technologies is a core activity for any commercial insurance company – it’s expected by employers and enrollees. Likewise, the activities of the Coverage and Analysis Group at CMS are a core function for Medicare in its role as a payer. Subverting Medicare’s ability to evaluate technologies would inevitably invite payment for technology that shouldn’t be used by Medicare beneficiaries, and could result in lapses in Medicare program integrity. Being a prudent purchaser has been a core strategic objective of the agency dating back to the early 2000s.

Now a word about the price tag – also a subject of some hysteria in press reports. Despite accounts to the contrary, CMS did not make cost the sole basis for its Provenge decision. Many of the technologies that have been analyzed by the MEDCAC over the past few years, such as implantable cardiac defibrillators, are associated with higher Medicare costs. It’s counter-productive to vilify an agency for targeting its evidence-review resources on technologies that may be widely used in Medicare and have significant implications to its budget. That’s sensible management commonly employed by commercial insurers in the US, not rationing.

Of course, the growing use of NCDs does have an impact on industry, but one that should be positive in the long run for driving real innovation. The bar is going up for evidence, and CMS – like private insurers – continues to demand more real-world data. Fortunately, the industry is rising to the call to generate more evidence on the safety, efficacy, and effectiveness of its products and to accommodate the demands of payers all across the globe. As these data become available, payers will likewise need to rise to the call of making valuable technologies fully accessible to beneficiaries who may benefit from them.

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The authors make the important distinction between prioritizing coverage reviews based on cost and making cost a factor in the coverage review. The challenge will be to ensure that cost considerations do not influence what otherwise should be a clinical judgement at least in the NCD context. There is considerable evidence, however, that in private sector coverage policies, cost has become a factor in denying coverage where insurers decide that a more costly technology has no proven benefits over another treatment option. Within Medicare, the next step, currently under consideration with least costly alternative and other proposals, would be to make comparative cost a factor in reimbursement decisions.

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